An Eleventh Hour Vote on Tax Extenders: Research & Development, Bonus Depreciation, and other Temporary Tax Policies

The US House of Representatives draft of tax extenders, H.R. 5771, the Tax Increase Prevention Act of 2014, is to be considered in the House today, Tuesday, December 2, 2014. The draft is a one year bill that would extend most of the tax relief provisions that expired in 2013 retroactively for one year, through 2014. The temporary legislation would allow Congress to continue its efforts to make certain expiring tax provisions permanent to provide more certainty to individuals and businesses, and allow taxpayers to plan for filing their 2014 tax returns.

Business Tax Extender provisions of note:

  • Extension of research credit (the research credit proposed does not include the increase rates or other expansions approved by the Senate Finance Committee in April.)
  • Extension of temporary minimum low-income housing tax credit rate for non-Federally subsidized buildings.
  • Extension of new markets tax credit.
  • Extension of work opportunity tax credit.
  • Extension of bonus depreciation.
  • Extension of increased expensing limitations and treatment of certain real property as section 179 property.

Individual Tax Extender provisions of note:

  • Extension of exclusion from gross income of discharge of qualified principal residence indebtedness.
  • Extension of deduction of State and local general sales taxes.
  • Extension of above-the-line deduction for qualified tuition and related expenses.
  • Extension of tax-free distributions from individual retirement plans for charitable purposes.

H.R. 5771 contains various Energy Tax Extenders and corrects numerous technical and clerical errors in the tax code, as well as eliminating many superfluous provisions (known as “deadwood”) that no longer serve any purpose.

In April, the US Senate Finance Committee approved the EXPIRE (Expiring Provisions Improvement Reform and Efficiency Act of 2014) that would have provided a two year (2014 and 2015) extension of several expiring provisions for individual and business tax deductions and tax credits.